Financial Statement Analysis of Flight Center

Financial statement
Analysis of Flight
Center

Executive Summary-
In this report, financial statement analysis of company is done. Financial statement analysis is
very important for company to know the performance of company related to its financials.
Financial statement includes balance sheet, cash flow statement and profit and lost statement. In
this report, flight center is analyzed to know its financial performance and compared with past
years to measure the growth of the company.

Table of Contents
Executive Summary-...................................................................................................................................2
Introduction-................................................................................................................................................4
Profitability Ratio-.......................................................................................................................................4
Efficiency ratio-...........................................................................................................................................6
Liquidity ratio-............................................................................................................................................7
Capital structure-.........................................................................................................................................8
Recommendations-....................................................................................................................................10
Conclusion-...............................................................................................................................................10

Introduction-
This report is based on measurement of financial performance of the flight center travel group. It
is a travel agency based in Australia. It is founded in 1982 by Graham Turner. Company is
headquartered in Brisbane, Queensland Australia. Company has three divisions which are in
Australia, UK and Canada. Subsidiaries of company are Olympus tours, Student universe, FCM
travel solutions, Liberty travel, Aunt betty and Flight centre exclusive. It is public company. It
was started in a store in 1995. In 2015, company acquired student universe and next year
company introduced its online travel brand Aunt Betty. Company’s aim is to provide services at
lower prices than retail location of flight center. Company operates in more than 80 countries. It
has multiple brands in flight center new Zealand which involves Travel Money NZ and corporate
traveller. Financial statements of Flight center are analyzed in order to see the financial
performance of the company.
Profitability Ratio-
Profitability ratios are to measure the income of the company. It is very important to check
profitability of company. It shows the cash generation capacity of the company. Various types of
profitability ratios are used to measure the income of the company it includes net profit margin,
gross profit margin, operating profit margin, return to equity and return to assets. All these ratio
plays main role in checking the profitability of the company. Some profitability ratios are
calculated as follows-
Return on equity-
Company uses this measure to check its profitability in relation to shareholders equity. In order
to calculate return on equity, net income and equity must be a positive number. Return on equity
can be calculated by following formula-
Return on equity = Net income/ Shareholder’s equity
Shareholder’s equity = Total assets – Total liabilities
Flight center has an increase in its return on equity. In 2019 return on equity was only 17% but in
2020 it is increased by 46%. It is very good sign. It means company is generating more profit
when it is compared to past year. Performance of company is very strong in 2020. In 2019,